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EU Divided Over Response to Trump’s Tariff Threats
While the European Union presents a united front against U.S. President Donald Trump’s newly announced tariffs on steel and aluminum, internal divisions are emerging over the best course of action. Some member states, led by France, are pushing for swift retaliatory measures, while others, including Germany, Italy, and Hungary, advocate for a more cautious approach focused on dialogue.
Trump’s Tariffs Spark Urgent EU Talks
Trump’s latest tariff decision, announced Monday, includes a 25% levy on imported steel and aluminum, citing national security concerns. The executive order, set to take effect on March 12, was followed by another announcement on Thursday: a plan for reciprocal tariffs on U.S. trading partners, to be determined on a country-by-country basis in the coming weeks.
In response, the European Commission vowed on Friday to react “firmly and immediately”, setting the stage for internal debate within the EU over how to proceed.
Hawks vs. Doves: A Divided Approach
Following an emergency video conference of EU trade ministers on Wednesday, the rift between hawks and doves became apparent.
- France, leading the hawkish camp, argues that strong and immediate retaliation is necessary to prevent excessive concessions to the U.S. “Every U.S. measure announced calls for an immediate response,” one official told Euronews.
- Germany, Italy, and Hungary, in contrast, prefer a more measured approach, advocating for continued negotiations with Washington rather than hastily imposing countermeasures. A diplomat from this group emphasized the importance of avoiding a tit-for-tat trade war.
Hungary, where Prime Minister Viktor Orbán maintains close ties with Trump, is pushing for no retaliatory action before March 12. Meanwhile, Italy insists on keeping diplomatic channels open before resorting to tariffs.
EU’s History of Retaliation and Future Strategy
The EU has previously responded to Trump-era tariffs. In 2018, the bloc countered U.S. duties on European steel (25%) and aluminum (10%) with €2.8 billion in tariffs on American goods. A temporary truce was brokered under President Joe Biden, but that agreement expires at the end of March 2024.
Since then, the EU has bolstered its trade defenses, introducing anti-coercion measures that allow restrictions on public procurement, services, and intellectual property rights in retaliation to trade threats.
Strengthening Global Trade Partnerships
Amid tensions with the U.S., the EU is working to expand its global trade network. Recent agreements include:
- A free trade deal with Mercosur nations (Argentina, Brazil, Paraguay, Uruguay)
- A trade pact with Switzerland, finalized in December
- A renewed agreement with Mexico, completed in January
- Reopened negotiations with Malaysia
Later this month, all EU Commissioners will travel to India for talks on a strategic partnership, including discussions on trade cooperation.
Outlook: Trade Tensions or Compromise?
With Trump signaling broader trade policy changes, EU officials, including Trade Commissioner Maroš Šefčovič, have warned that the bloc must prepare for more than just steel and aluminum tariffs.
Following a meeting with Canadian Prime Minister Justin Trudeau, European Council President António Costa reinforced the EU’s preference for diplomacy, tweeting: “Trade agreements are better than trade tariffs.”
Whether the EU opts for immediate retaliation or ongoing negotiations, its ability to maintain a cohesive response will be crucial in shaping its economic future amid a shifting global trade landscape.
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Iran Claims Strikes on US Bases as Hormuz Tensions Escalate
Iran’s Revolutionary Guards Corps (IRGC) said early Wednesday it had launched attacks against US military facilities in Bahrain and Kuwait, marking another escalation in the conflict as the United States continued military operations against Iran and renewed restrictions on Iranian shipping in the Strait of Hormuz.
The IRGC said it targeted the US Fifth Fleet’s command-and-control facilities, logistical centres, petroleum installations and military equipment in Bahrain, along with a US base in Kuwait. Iranian state media described the strikes as retaliation for recent American military operations and efforts to control maritime traffic through the Strait of Hormuz.
In a statement carried by local media, the IRGC warned that if Washington continued trying to restrict regional oil and gas exports by controlling key shipping routes, Iran would seek to disrupt other energy corridors serving US and allied interests. The statement declared that regional energy exports would be “for everyone or for no one,” although it did not specify which routes could be targeted.
Missile warning systems were activated in Bahrain and Kuwait as Iranian projectiles approached. Jordanian authorities said their air defence systems intercepted three incoming Iranian missiles, while Kuwait’s military reported repelling Iranian drone attacks. Iran also claimed it had targeted US military facilities at Jordan’s Azraq Air Base for a second time.
US Navy Admiral Brad Cooper, commander of US Central Command, confirmed that Iran had launched dozens of missiles and drones toward neighbouring Gulf countries.
The latest exchange came after the US military carried out a fourth consecutive night of operations against Iranian targets. According to US Central Command, fighter aircraft, drones and naval vessels conducted a seven-hour mission targeting Iranian missile and drone sites, naval assets and coastal defence systems.
CENTCOM said the strikes were intended to reduce Iran’s ability to threaten commercial shipping and civilian vessels operating in and around the Strait of Hormuz, a waterway that normally handles around one-fifth of the world’s oil and liquefied natural gas trade.
President Donald Trump also renewed warnings that the United States could expand its campaign if diplomatic efforts fail. In a televised interview with Fox News on Tuesday night, Trump said Washington would eventually target Iran’s energy infrastructure unless Tehran agreed to return to negotiations.
“We’re going to knock out all their power plants. We’re gonna knock out their bridges unless they get to the table and negotiate,” Trump said, adding that energy facilities remained potential targets.
The latest hostilities have cast further doubt over a temporary agreement reached in June after the United States lifted an earlier blockade of Iranian shipping to allow negotiations over Tehran’s nuclear programme. Talks have since stalled as military confrontations around the Strait of Hormuz intensified, raising concerns about regional security and the stability of global energy supplies.
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